The price of Natural Gas declined 2.8%
(up 113% year to date).
Gasoline’s +5.1% increase
pushed y-t-d gains to 76%
Chinese thermal coal
(Zhengzhou Commodity Exchange)
prices surged +34% last week
October 10
– Associated Press
(Michael Phillis):
“After water levels at a California dam fell to historic lows this summer, the main hydropower plant it feeds was shut down. At the Hoover Dam in Nevada — one of the country’s biggest hydropower generators — production is down by 25%. If extreme drought persists, federal officials say a dam in Arizona could stop producing electricity in coming years. Severe drought across the West drained reservoirs this year, slashing hydropower production and further stressing the region’s power grids. And as extreme weather becomes more common with climate change, grid operators are adapting to swings in hydropower generation.”
October 10
– Financial Times
(David Sheppard):
“If you live in continental Europe or the UK the natural gas that heats your home this October is costing at least five times more than it did a year ago. The reasons are varied: among them are earthquakes in the Netherlands, China’s attempt to clean up its air and Russian president Vladimir Putin’s power politics. But the impact is clear. The record prices being paid by suppliers in Europe and shortfalls in gas supply across the continent have stoked fears of an energy crisis should the weather be even marginally colder than normal. Households are already facing steeper bills while some energy intensive industries have started to slow production, denting the optimism around the post-pandemic economic recovery.”
October 11
– CNBC
(Saheli Roy Choudhury):
“China is not the only Asian giant grappling with an energy crunch — India is also teetering on the edge of a power crisis. Most of India’s coal-fired power plants have critically low levels of coal inventory at a time when the economy is picking up and fueling electricity demand. Coal accounts for around 70% of India’s electricity generation… Government data showed that as of Oct. 6, 80% of India’s 135 coal-powered plants had less than 8 days of supplies left — more than half of those had stocks worth two days or fewer. By comparison, over the last four years, the average coal inventory that power plants had was around 18 days worth of supply…”
October 11
– Bloomberg
(Mark Burton and
Jack Farchy):
“Aluminum jumped to the highest since 2008 as a deepening power crisis squeezes supplies of the energy-intensive metal that’s used in everything from beer cans to iPhones. Industry insiders like to joke that aluminum is basically ‘solid electricity.’ Each ton of metal takes about 14 megawatt hours of power to produce, enough to run an average U.K. home for more than three years. If the 65 million ton-a-year aluminum industry was a country, it would rank as the fifth-largest power consumer in the world.”
October 12
– Bloomberg
(Serene Cheong,
Javier Blas and
Alfred Cang):
“Offers for physical cargoes of thermal coal in China skyrocketed this week after reports of local outages and supply disruptions. Selling indications for so-called 5,500 NAR coal were pegged at above 2,000 yuan ($310) a ton on Monday… That compares with 1,600 to 1,700 yuan a ton before the nation’s Golden Week holiday that ended last Thursday…”
October 12
– Reuters
(Muyu Xu and
Shivani Singh):
“ ... Power prices have surged to record highs in recent weeks, driven by shortages in Asia and Europe… China on Tuesday took its boldest step in a decades-long power sector reform, saying it will allow coal-fired power plants to pass on the high costs of generation to some end-users via market-driven electricity prices. Pushing all industrial and commercial users to the power exchanges and allowing prices to be set by the market is expected to encourage loss-making generators to increase output.”
October 13
– Financial Times
(Primrose Riordan and
William Langley):
“Chinese imports of coal and natural gas increased sharply in September, as Beijing raced to deal with a spiralling energy crisis that threatens economic growth. China imported 32.9m tonnes of coal in September, 76% more than it did during the same month last year… Natural gas imports rose 23% to 10.6m tonnes compared with the previous year.”
October 13
– Wall Street Journal
(Georgi Kantchev and
Benoit Faucon):
“The natural gas shortage that drove prices to records in Europe has exposed Russia’s rising leverage over global energy markets, with Moscow now playing a key role in everything from OPEC negotiations to coal exports to China. Russia, the world’s largest exporter of gas and the source of more than a third of Europe’s gas, has emerged as a critical supplier with the power to quickly alleviate the continent’s gas deficit. Western officials accuse the Kremlin of trying to score geopolitical points by withholding extra supplies, a charge Moscow denies. Moscow instead says it is the troubleshooter in volatile global energy markets. It denies it is exploiting its huge energy reserves for political gain.”
October 13
– Bloomberg
(Irina Reznik and
Henry Meyer):
“Fresh from crowing over Europe’s gas crisis, Russian President Vladimir Putin now sees a chance to capitalize on it. Putin wants to press the European Union to rewrite some of the rules of its gas market after years of ignoring Moscow’s concerns, to tilt them away from spot-pricing toward long-term contracts favored by Russia’s state run Gazprom… Russia’s also seeking rapid certification of the controversial Nord Stream 2 pipeline to Germany to boost gas deliveries, they said. Russia is prepared to supply as much gas as Europe needs and is ready for dialog with the EU on stabilizing the market, Putin said…”
October 14
– Reuters
(Shivani Singh and
Muyu Xu):
“China coal prices held near record highs on Thursday as cold weather swept into the country's north and power plants stocked up on the fuel to ease an energy crunch that is fueling unprecedented factory gate inflation. A widening power crisis in China, affecting at least 17 regions - caused by shortages of coal, record high fuel prices and booming post-pandemic industrial demand as it shifts to greener fuels - has led to production disruption at numerous factories… China's National Meteorological Center has forecast strong winds could knock the average temperature by as much as 14 degrees Celsius in large parts of the country this week. The three northeastern provinces of Jilin, Heilongjiang and Liaoning - among the worst hit by the power shortages last month - and several regions in northern China including Inner Mongolia and Gansu, have started winter heating, which is mainly fuelled by coal, to cope with the colder-than-normal weather.”
October 15
– Financial Times
(Hudson Lockett and Thomas Hale):
“Chinese coal futures delivered their biggest weekly rise on record, driven by a worsening energy crisis that threatens to pile further pressure on the country’s property developers as they grapple with looming debt payments. Thermal coal futures traded on the Zhengzhou Commodity Exchange rose 8% on Friday to Rmb1,692 ($263) a tonne, taking them 34% higher over the past five sessions and marking the largest weekly gain since they began trading… in 2013.”